Are you considering purchasing a new construction home in Silicon Valley? With a limited inventory of previously owned homes in the housing market, it’s no surprise that many first-time home buyers are turning to new construction as a viable option. In fact, the National Association of Home Builders reports that one-third of the current housing market inventory consists of new construction homes. However, there are several misconceptions surrounding these homes that may cloud your judgment. In this article, we’ll debunk seven common myths about new construction homes and provide you with the facts you need to make an informed decision for you and your family.
Myth 1: New Construction Homes Are More Expensive
It’s true that new construction homes typically have a higher upfront cost compared to previously-owned homes. However, if you look beyond the price tag, you’ll find that these homes can save you money in the long run. New construction homes come with brand-new roofs, plumbing systems, flooring, heating and air conditioning, and energy-efficient appliances. In contrast, previously owned homes may require costly repairs and upgrades due to wear and tear on these essential components. By choosing a new construction home, you can avoid these expenses for several years. Additionally, most new homes come with a warranty that covers any repairs that may be needed, providing you with peace of mind.
Myth 2: Financing a New Construction Home Is Difficult
Contrary to popular belief, financing a new construction home can often be easier and simpler than financing a previously owned home. Many reputable builders have established relationships with lenders who are familiar with the quality of their work. These lenders are more flexible when it comes to financing new construction homes, as they perceive them as lower risk. Some new construction companies even have their own lending companies, offering incentives and better mortgage deals to buyers who choose to work with them. This makes securing financing for your new home a smoother process.
Myth 3: It Takes Forever to Build a New Construction Home
While it’s true that building a new construction home takes time, it doesn’t mean you’ll have to wait for months before moving in. Many home builders start constructing homes long before they have buyers, resulting in move-in-ready homes being available. These homes, known as spec homes, may already be completed or in the final stages of construction when you begin your search. However, it’s important to plan ahead and inquire about the progress of the home you’re interested in. Factors such as the supply chain, availability of labor and materials, and municipal permitting times can influence the build time of a new construction home.
Myth 4: New Construction Homes Don’t Appreciate in Value
Contrary to the belief that new construction homes don’t appreciate in value, these homes can actually appreciate quickly. As the builder sells more homes within the community, the prices of the remaining homes tend to increase. Therefore, by purchasing a new construction home, you may find that you’ve built equity even before moving in. Additionally, the completion of the entire community can further contribute to the appreciation of your home’s value.
Myth 5: Quality Standards Are Lower for New Construction Homes
Regardless of the type of home, whether it’s a new construction or previously owned property, the building construction principles remain the same. New construction homes are built to meet the requisite standards and are subject to the latest building codes. These codes have become more demanding over time, ensuring that new homes are constructed with high-quality materials and workmanship. Therefore, you can expect a new construction home in Silicon Valley to meet the same quality standards as any other home.
Myth 6: Home Inspections Are Unnecessary for New Construction Homes
Home inspections are a critical component of the home-buying process, even for new construction properties. While reputable builders conduct their own inspections, it’s advisable to hire a third-party inspector to ensure that the property is built according to local building codes. You can even schedule periodic inspections throughout the construction process to gain a better understanding of the home’s condition. It’s important to note that any builder who refuses to allow a home inspection should raise a red flag. New construction homes are also inspected by local municipalities throughout the build, ensuring compliance with building codes before move-in is permitted.
Myth 7: You Don’t Need a Real Estate Agent for New Construction Deals
While it may not be required, having a real estate agent by your side when purchasing a new construction home is highly beneficial, especially if you’re a first-time home buyer. A knowledgeable and trusted real estate professional will work in your best interest to negotiate the best price, contract terms, warranties, completion dates, and other incentives. Even though builders may not require you to have an agent, involving one can help you get the most value for your money and ensure a smooth transaction. Builders often include the cost of the agent’s commission as part of their marketing budget, so not having an agent won’t necessarily result in a better deal.
In conclusion, purchasing a new construction home in Silicon Valley can be a wise decision, provided you separate fact from fiction. New construction homes may have a higher upfront cost, but they offer long-term savings by avoiding the need for immediate repairs and upgrades. Financing new construction homes can be easier, thanks to established relationships between builders and lenders. While construction times vary, move-in-ready homes are often available. New construction homes can appreciate in value, meet high-quality standards, and require inspections like any other property. Finally, having a real estate agent can help you navigate the process and ensure a successful transaction. With these myths debunked you can confidently explore the world of new construction homes in Silicon Valley.